Sugar refiners demand subsidy to keep market price stable
Saturday, 16 January 2010
Jasim Uddin Haroon
The country's sugar refiners urged the government to provide them with subsidy to keep the price of the commodity stable in the local market as international market price of sugar continues to rise.
Currently finished sugar is being sold at US$ 730 per tonne in the London market.
The sugar price has been rising for the last several months in the international market mainly due to production shortfall in major sugarcane growing countries like Brazil and India.
Brazil, the largest sugar growing country, faced drought during the cultivation season while India, the second largest grower and importer, faced excessive rainfall resulting in sharp fall in production.
The Bangladesh Sugar Refiners Association (BSRA) has already written to the Ministry of Commerce (MoC) seeking subsidy for the refiners.
Golam Mostafa, secretary general of BSRA told the FE: "It is impossible to sell sugar at the government fixed price."
The government earlier in October, set the price of sugar at Tk 45 a kilogramme (kg) at mills gate and Tk 48 at wholesale level. Before resetting the price in October, sugar was sold at Tk 38 per kg at mills gate.
According to BSRA, each kilogramme of sugar will cost Tk 58 as per the present international price, as Tk 9,000 will be required for refining one tonne of sugar, BSRA claimed.
On Thursday, two major wholesale markets at Moulvi Bazar in Dhaka and Khatoonganj in Chittagong delivered sugar between Tk 1,950 and Tk 1,960 per maund (37.32 kg) against Tk 1,600 a week before.
The price of sugar at the retail level now stands at Tk 60 per kg against Tk 54 a week back.
Sugar is being sold at Tk 60 per kg against Tk 54 a week back at the retail level.
Mosahrrof Hossain Mintu, a trader at Khatoonganj said the price of sugar remained volatile over the past few days.
He added: "The situation is becoming severe as the import of sugar remained suspended for few months due to its high price in the international market."
Abul Bashar, chairman of Masud and Brothers, a leading importer, blaming the government for not taking timely action to import sugar, said: "At least 300,000 tonnes of finished sugar could have entered the local market two or three months back if the government had withdrawn levies on sugar import during September-October in 2009."
He said withdrawal of duty now will not yield any results as it price hit all time high this week.
BSRA in its letter to the ministry also proposed import of raw sugar by the government which the private millers could refine for a minimal processing cost.
Bangladesh's annual demand for refined sugar is around 1.3 million tonnes. Local refiners produce around 1.2 million tonnes each year while state-owned sugar mills under the Bangladesh Sugar and Food Industries Corporation produce around 80,000 tonnes.
The country's sugar refiners urged the government to provide them with subsidy to keep the price of the commodity stable in the local market as international market price of sugar continues to rise.
Currently finished sugar is being sold at US$ 730 per tonne in the London market.
The sugar price has been rising for the last several months in the international market mainly due to production shortfall in major sugarcane growing countries like Brazil and India.
Brazil, the largest sugar growing country, faced drought during the cultivation season while India, the second largest grower and importer, faced excessive rainfall resulting in sharp fall in production.
The Bangladesh Sugar Refiners Association (BSRA) has already written to the Ministry of Commerce (MoC) seeking subsidy for the refiners.
Golam Mostafa, secretary general of BSRA told the FE: "It is impossible to sell sugar at the government fixed price."
The government earlier in October, set the price of sugar at Tk 45 a kilogramme (kg) at mills gate and Tk 48 at wholesale level. Before resetting the price in October, sugar was sold at Tk 38 per kg at mills gate.
According to BSRA, each kilogramme of sugar will cost Tk 58 as per the present international price, as Tk 9,000 will be required for refining one tonne of sugar, BSRA claimed.
On Thursday, two major wholesale markets at Moulvi Bazar in Dhaka and Khatoonganj in Chittagong delivered sugar between Tk 1,950 and Tk 1,960 per maund (37.32 kg) against Tk 1,600 a week before.
The price of sugar at the retail level now stands at Tk 60 per kg against Tk 54 a week back.
Sugar is being sold at Tk 60 per kg against Tk 54 a week back at the retail level.
Mosahrrof Hossain Mintu, a trader at Khatoonganj said the price of sugar remained volatile over the past few days.
He added: "The situation is becoming severe as the import of sugar remained suspended for few months due to its high price in the international market."
Abul Bashar, chairman of Masud and Brothers, a leading importer, blaming the government for not taking timely action to import sugar, said: "At least 300,000 tonnes of finished sugar could have entered the local market two or three months back if the government had withdrawn levies on sugar import during September-October in 2009."
He said withdrawal of duty now will not yield any results as it price hit all time high this week.
BSRA in its letter to the ministry also proposed import of raw sugar by the government which the private millers could refine for a minimal processing cost.
Bangladesh's annual demand for refined sugar is around 1.3 million tonnes. Local refiners produce around 1.2 million tonnes each year while state-owned sugar mills under the Bangladesh Sugar and Food Industries Corporation produce around 80,000 tonnes.